Question

A preretirement distribution from a qualified retirement plan can escape the 10% penalty in each of these situations except

A)the distributions were made after a separation from service for early retirement at any age.
B)the distributions were made as part of a series of substantially equal periodic payments made at least annually over the life or life expectancy of the employee or the joint lives or life expectancies of the employee and beneficiary.
C)the distributions were made due to the disability of the account owner.
D)the distributions were made to a beneficiary or to an employee's estate on or after the employee's death.

Answer 1

A preretirement distribution from a qualified retirement plan can escape the 10% penalty in certain situations. Option A, where the distributions were made after a separation from service for early retirement at any age, is the exception.

Step-by-step explanation:

A preretirement distribution from a qualified retirement plan can escape the 10% penalty under certain circumstances. The options given are:

1. The distributions were made after a separation from service for early retirement at any age.
2. The distributions were made as part of a series of substantially equal periodic payments made at least annually over the life or life expectancy of the employee or the joint lives or life expectancies of the employee and beneficiary.
3. The distributions were made due to the disability of the account owner.
4. The distributions were made to a beneficiary or to an employee's estate on or after the employee's death.

Among these options, the one where the preretirement distribution would not escape the 10% penalty is option A, where the distributions were made after a separation from service for early retirement at any age.